Fourth-Quarter 2014 Earnings Bob Patel, Chief Executive Officer - - PowerPoint PPT Presentation

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Bob Patel, Chief Executive Officer Karyn Ovelmen, Chief Financial Officer Sergey Vasnetsov, SVP – Strategic Planning and Transactions Doug Pike, VP – Investor Relations

Fourth-Quarter 2014 Earnings

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Cautionary Statement

2 The statements in this presentation relating to matters that are not historical facts are forward-looking statements. These forward-looking statements are based upon assumptions of management which are believed to be reasonable at the time made and are subject to significant risks and uncertainties. Actual results could differ materially based on factors including, but not limited to, the business cyclicality of the chemical, polymers and refining industries; the availability, cost and price volatility of raw materials and utilities, particularly the cost of oil, natural gas, and associated natural gas liquids; competitive product and pricing pressures; labor conditions; our ability to attract and retain key personnel; operating interruptions (including leaks, explosions, fires, weather-related incidents, mechanical failure, unscheduled downtime, supplier disruptions, labor shortages, strikes, work stoppages or other labor difficulties, transportation interruptions, spills and releases and other environmental risks); the supply/demand balances for our and our joint ventures’ products, and the related effects of industry production capacities and operating rates; our ability to achieve expected cost savings and other synergies; our ability to successfully execute projects and growth strategies; legal and environmental proceedings; tax rulings and changes in laws, regulations or treaties, consequences or proceedings; technological developments, and our ability to develop new products and process technologies; potential governmental regulatory actions; political unrest and terrorist acts; risks and uncertainties posed by international operations, including foreign currency fluctuations; and our ability to comply with debt covenants and service our

• debt. Additional factors that could cause results to differ materially from those described in the forward-looking statements can

be found in the “Risk Factors” section of our Form 10-K for the year ended December 31, 2013, which can be found at www.lyondellbasell.com on the Investor Relations page and on the Securities and Exchange Commission’s website at www.sec.gov. The illustrative results or returns of growth projects are not in any way intended to be, nor should they be taken as, indicators or guarantees of performance. The assumptions on which they are based are not projections and do not necessarily represent the Company’s expectations and future performance. You should not rely on illustrated results or returns or these assumptions as being indicative of our future results or returns. This presentation contains time sensitive information that is accurate only as of the date hereof. Information contained in this presentation is unaudited and is subject to change. We undertake no obligation to update the information presented herein except as required by law.

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Information Related to Financial Measures

3 This presentation makes reference to certain “non-GAAP” financial measures as defined in Regulation G of the U.S. Securities Exchange Act of 1934, as amended. The non-GAAP measures we have presented include income from continuing operations excluding LCM, diluted earnings per share excluding LCM, EBITDA and EBITDA excluding LCM. LCM stands for “lower of cost

• r market,” which is an accounting rule consistent with GAAP related to the valuation of inventory. Our inventories are stated at

the lower of cost or market. Cost is determined using last-in, first-out (“LIFO”) inventory valuation methodology, which means that the most recently incurred costs are charged to cost of sales and inventories are valued at the earliest acquisition

• costs. Market is determined based on an assessment of the current estimated replacement cost and selling price of the
• inventory. In periods where the market price of our inventory declines substantially, cost values of inventory may be higher than

the market value, which results in us writing down the value of inventory to market value in accordance the LCM rule, consistent with GAAP. We report our financial results in accordance with U.S. generally accepted accounting principles, but believe that certain non-GAAP financial measures, such as EBITDA and earnings and EBITDA excluding LCM, provide useful supplemental information to investors regarding the underlying business trends and performance of the company's ongoing operations and are useful for period-over-period comparisons of such operations. Non-GAAP financial measures should be considered as a supplement to, and not as a substitute for, or superior to, the financial measures prepared in accordance with GAAP. EBITDA, as presented herein, may not be comparable to a similarly titled measure reported by other companies due to differences in the way the measure is calculated. We calculate EBITDA as income from continuing operations plus interest expense (net), provision for (benefit from) income taxes, and depreciation & amortization. EBITDA should not be considered an alternative to profit or operating profit for any period as an indicator of our performance, or as alternative to operating cash flows as a measure of our liquidity. We have also presented financial information herein exclusive of adjustments for LCM. While we also believe that free cash flow (FCF) and book capital are measures commonly used by investors, free cash flow and book capital, as presented herein, may not be comparable to similarly titled measures reported by other companies due to differences in the way the measures are calculated. For purposes of this presentation, free cash flow means net cash provided by operating activities minus capital expenditures and book capital means total debt plus stockholders’ equity plus minority interests. Reconciliations for our non-GAAP measures can be found on our website at www.lyb.com/investorrelations

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Highlights

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EBITDA

FY 2014 EPS Growth ~32% vs. 2013 and 80% vs. 2012(2) FY 2014 EPS Growth ~32% vs. 2013 and 80% vs. 2012(2)

($ in millions)

Income from Continuing Operations

500 1,000 1,500 2,000 $2,500 1Q'13 2Q'13 3Q'13 4Q'13 1Q'14 2Q'14 3Q'14 4Q'14 As Reported Excluding LCM 1,000 2,000 3,000 4,000 $5,000 2012 2013 2014 As Reported Excluding LCM

($ in millions, except per share data) FY 2012 FY 2013 FY 2014

(As Reported)

FY 2014

(ex. LCM)

EBITDA $5,808 $6,311 $7,050 $7,810 Income from Continuing Operations $2,858 $3,860 $4,172 $4,655 Diluted Earnings ($ / share) from Continuing Operations $4.96 $6.76 $8.00 $8.92

(1)

(1) LCM stands for “lower of cost or market.” An explanation of LCM and why we have excluded it from our financial information in this presentation can be found on the third page of this presentation under “Information Related to Financial Measures.” (2) Calculated using EBITDA results excluding the impact of the LCM adjustments

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LyondellBasell Safety Performance

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1) Includes employees and contractors.

0.00 0.15 0.30 0.45 0.60 2009 2010 2011 2012 2013 2014

Safety - Injuries per 200,000 Hours Worked(1) Indexed Environmental Incidents Indexed Process Incidents

0% 25% 50% 75% 100% 2009 2010 2011 2012 2013 2014 0% 25% 50% 75% 100% 2009 2010 2011 2012 2013 2014

Continued Top Decile Safety Performance Continued Top Decile Safety Performance

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Segment EBITDA 2012 2013 2014 '13 - '14 Change 2014 '13 - '14 Change

O&P Americas 2,968 3,573 3,911 338 4,190 617 O&P EAI 548 839 1,366 527 1,410 571 I&D 1,621 1,492 1,459 (33) 1,552 60 Refining 481 182 65 (117) 409 227 Technology 197 232 232 232 Total EBITDA 5,808 6,311 7,050 739 7,810 1,499

As Reported Excluding LCM

• Completed 200 million pound per year

PE expansion and 800 million pound per year ethylene expansion

• First full year of Channelview methanol

plant operations

• Developing new propylene oxide and

ethylene projects

Financial Accomplishments

• Record earnings and cash flow
• Generated $6.0 billion cash from operations
• Repurchased more than 63 million shares for

$5.8 billion and paid $1.4 billion in dividends

• Increased quarterly dividend from $0.60 per

share to $0.70 per share

• Issued $1 billion 30 year bond at 4.875%

coupon

• Initiated commercial paper program
• Key Operating Rates:

– U.S. Ethylene: 95% excluding La Porte turnaround – EU Ethylene: 95% – PO: 90% – Refinery: 97%

• 53% of European ethylene produced from

advantaged feed

• Canadian crude sourcing was 10 - 15% of

processed crude

• Fixed costs managed flat since 2009

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2014 Accomplishments

Record financial results • Continued to return cash to shareholders • Advanced growth projects Record financial results • Continued to return cash to shareholders • Advanced growth projects

Operating Accomplishments

($ in millions)

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We are expanding our advantaged positions significantly

• 2,000

4,000 6,000 8,000 10,000 12,000 14,000 Before After MM Lbs.

• 500

1,000 1,500 2,000 2,500 3,000 3,500 4,000 Before After MM Lbs.

• 20

40 60 80 100 120 Before After MBPD

~ 25% ~ 35% ~ 40%

• 50

100 150 200 250 300 350 400 450 500 Before After MM Gal. Per Year

~ 130%

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U.S. Ethylene Methanol MTBE Equivalent Propylene Oxide

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60 120 180 240 300 1) I&D volumes exclude oxyfuels; 2) EU ethylene cash margins normalized to 2010 US margins. 2010 indexed margin is equal to 100%; 3) Polyethylene and Polypropylene spreads indexed to 2010; 2010 indexed margins are equal to 100%; * 2013 average crude processing rate excluding the impact from Q1’13 turnaround

Key Volumes and Margins: 2011 - 2014

2011 2012

MBPD ($/bbl) billion lbs billion lbs billion lbs billion lbs (Cents/gal)

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2013

% % %

(*)

2 4 6 8 10 US EU 3 6 9 12 15 2 4 6 8 10 2 5 7 10 12 25 50 75 100 125 150 175 200 225 US EU 30 60 90 120 150 US EU 20 40 60 80 100 120 US EU 25 50 75 100 125 5 10 15 20 25

Ethylene Volumes Polyethylene Volumes Polypropylene Volumes I&D Chemical Volumes(1) HRO Crude Rates Indexed Ethylene Cash Margins(2) Indexed Polyethylene Spreads(3) Indexed Polypropylene Spreads(3) MTBE Raw Material Margin Maya 2-1-1 Spreads

2014

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LCM Inventory Adjustment

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Source: Industry pricing data from third party consultants. January data as of January 29, 2015 Note: Brent and Gasoline represent the values of the last day of the

• month. All others are monthly figures.

Base inventory was established in 2010 as LYB entered the public market Base inventory was established in 2010 as LYB entered the public market

20 40 60 80 100 120 1,000 2,000 3,000 4,000 5,000 $6,000 Apr-10 Dec-11 Dec-12 Dec-13 Dec-14 Jan-15 $ per Barrel Inventory Inventory @ April 2010 Brent Crude

LYB Inventory and Brent Crude Oil History Key Raw Material and Product Pricing

Apr-10 Dec-14 Jan-15 Brent ($/bbl.) 86 55 49 Gasoline (¢/gal.) 240 144 135 MTBE (¢/gal.) 242 204 174 Polyethylene (¢/lb.) US 70 73 68 EU 65 60 53 Polypropylene (¢/lb.) US 89 78 68 EU 71 66 59

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Fourth Quarter 2014 and FY 2014 Segment EBITDA

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($ in millions) ($ in millions)

Full Year 2014 EBITDA Fourth Quarter 2014 EBITDA

• 400
• 200

200 400 600 800 1,000 1,200 $1,400 Olefins & Polyolefins - Americas Olefins & Polyolefins - EAI Intermediates & Derivatives Refining Technology

As Reported Results Excluding LCM

1,000 2,000 3,000 4,000 $5,000 Olefins & Polyolefins - Americas Olefins & Polyolefins - EAI Intermediates & Derivatives Refining Technology

As Reported Results Excluding LCM

EBITDA

• Op. Income

As Reported $1,406 $1,077 Excluding LCM $2,121 $1,792

Fourth Quarter

EBITDA

• Op. Income

As Reported $7,050 $5,736 Excluding LCM $7,810 $6,496

Full Year 2014

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$2,929 $2,974

2,000 4,000 6,000 8,000 10,000 $12,000

Q4 2014 Beginning Balance CF from Operations excl. Working Capital Working Capital Changes Capex Dividends & Share Repurchases Net Debt Borrowings Other Q4 2014 Ending Balance

$4,450 $2,974 2,000 4,000 6,000 8,000 10,000 $12,000

Q4 2013 Beginning Balance CF from Operations excl. Working Capital Working Capital Changes Capex Dividends & Share Repurchases Net Debt Borrowings Other Q4 2014 Ending Balance

Cash Flow

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1) Beginning and ending cash balances include cash and short-term securities; 2) Includes accounts receivable, inventories and accounts payable; 3) Includes capital and maintenance turnaround spending. ($ in millions)

Q4 2014 Full Year 2014

(3) (2) (1) (2) (1) (3) (1) (1)

~ $7.2 billion in dividends and share repurchases during 2014 ~ $7.2 billion in dividends and share repurchases during 2014

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Strong Cash Generation, Share Repurchases & Dividends

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Cash From Operations Dividends & Share Repurchases

($ in millions) ($ in millions)

• ~ 17 million shares repurchased

during Q4’2014 and ~ 91 million shares repurchased as of Dec. 31, 2014

• $15.6 billion of dividends and share

repurchases over four years

Key Statistics

1) Cash balances include cash and short-term securities.

Snapshot at December 31, 2014 LTM FCF: $4.5 billion LTM Capex: $1.5 billion Cash(1): $3.0 billion Total Debt/LTM EBITDA: 1.0x Total Debt/Book Capital: 46%

2,000 4,000 6,000 $8,000

2011 2012 2013 2014

Interim Dividends Special Dividends Share Repurchases 1,000 2,000 3,000 4,000 5,000 6,000 $7,000

2011 2012 2013 2014

Capex Free Cash Flow

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Olefins & Polyolefins – Americas Highlights and Business Drivers – 4Q’14

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U.S. Olefins

• Net sales and internal consumption

increased ~130 MM lbs

• Ethylene price and COE lower by

~6¢/lb

Polyethylene

• Spread up ~4¢/lb
• Volumes down ~6%

Polypropylene (includes Catalloy)

• Spread up ~1¢/lb
• Volumes down ~14%

Industry Ethylene Chain Margins(1) EBITDA Performance vs. 3Q’14(2) Industry Polypropylene Margins(1)

EBITDA Margin Volume

($ in millions) 1) Source: Quarterly average industry data from third party consultants; 2) The direction of the arrows reflects our underlying business metrics.

4Q’13 3Q’14 4Q’14 Jan’15

(cents / lb) (cents / lb) 200 400 600 800 1,000 1,200 $1,400 4Q'13 1Q'14 2Q'14 3Q'14 4Q'14 As Reported Excluding LCM 15 30 45 60

Ethane Margin Naphtha Margin HDPE Margin Ethylene/HDPE Chain

0.0 1.5 3.0 4.5 6.0 7.5 4Q'13 3Q'14 4Q'14 Jan'15

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(10) 5 20 35 50 4Q'13 3Q'14 4Q'14 Jan'15

Naphtha Margin HDPE Margin Ethylene/HDPE Chain

Olefins & Polyolefins – Europe, Asia, International Highlights and Business Drivers – 4Q’14

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EU Olefins

• Higher naphtha margin
• Advantaged feedstocks ~56%
• Operating rate ~97%

Polyethylene

• Volumes down ~2%

Polypropylene (includes Catalloy)

• Volumes down ~4%

JV equity income

Industry European Ethylene Chain Margins(1) EBITDA Performance vs. 3Q’14(2) Industry European Polypropylene Margins(1)

EBITDA Margin Volume (cents / lb) (cents / lb) 1) Source: Quarterly average data from third party consultants; 2) The direction of the arrows reflects our underlying business metrics. ($ in millions) 100 200 300 $400 4Q'13 1Q'14 2Q'14 3Q'14 4Q'14 As Reported Excluding LCM (4) (2) 2 4 4Q'13 3Q'14 4Q'14 Jan'15

www.lyb.com 40 80 120 160 4Q'13 3Q'14 4Q'14 Jan'15

20 40 60 4Q13 3Q14 4Q14 1Q15 E

Intermediates & Derivatives Highlights and Business Drivers – 4Q’14

15 EBITDA

Propylene Oxide and Derivatives

• Margins lower after strong Q3
• Volume stable

Intermediates

• Styrene margins up ~4¢/lb
• Volume lower on maintenance

Oxyfuels

• Sales volume lower
• Lower margin from lower gasoline

price

EBITDA Margin Volume

Performance vs. 3Q’14(2)

($ in millions)

EU MTBE Raw Material Margins (per Platts)(1)

(cents / gallon)

P-Glycol Raw Material Margins (per Chemdata)(1)

1) Data represents quarterly average; 2) The direction of the arrows reflects our underlying business metrics. 100 200 300 400 $500 4Q'13 1Q'14 2Q'14 3Q'14 4Q'14 As Reported Excluding LCM (cents / lb)

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100 200 300 4Q'13 1Q'14 2Q'14 3Q'14 4Q'14

Refining Highlights and Business Drivers – 4Q’14

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Houston Refinery

• Maya 2-1-1: $17.72 per bbl, down

$6.63 from 3Q’14

• Crude throughput: 266 MBPD
• Cost of RINs flat

EBITDA Performance vs. 3Q’14(2)

EBITDA Margin Volume

($ in millions) 1) Light Louisiana Sweet (LLS) is the referenced light crude. Data represents quarterly average; 2) The direction of the arrows reflects our underlying business metrics.

Capacity = 268 MBPD

Refining Spreads (per Platts)(1) Refining Throughput

($ / bbl) (MBPD)

• 350
• 300
• 250
• 200
• 150
• 100
• 50

50 100 150 $200 4Q'13 1Q'14 2Q'14 3Q'14 4Q'14 As Reported Excluding LCM 10 20 30 4Q'13 3Q'14 4Q'14 Jan'15

Lt-Hvy (LLS-Maya) Lt-Gasoline (USG C RBOB - LLS) Lt-ULSD (USGC ULSD - LLS)

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Fourth Quarter Summary and Outlook

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– Volatility of crude oil and product pricing makes quantification difficult – Crude oil price decline has continued into early Q1 – U.S. NGL cracking remains globally advantaged; U.S. ethylene chain margins remain good but not at record 2014 levels – European olefin and polyolefin prices have continued to adjust to crude oil pricing with a time lag; margins are holding – I&D impacted by scheduled Channelview methanol plant maintenance – Refining receiving Canadian crude through Enbridge pipeline system – Record quarter excluding LCM charge – Continued to return cash to shareholders:

• Share repurchases and dividends totaled $1.8

billion during the quarter

• ~17.2 million shares were repurchased during

the quarter, or 3.4%(1)

Fourth Quarter Summary Near-Term Outlook

(1) As % of shares outstanding as of 09/30/14

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Investor Day 2015: Save the Date

18

LyondellBasell is planning an Investor Day to be held on the morning of April 29, 2015, in New York City. At this half-day session, you will have an opportunity to interact with members

• f our leadership team and get an update on current results,

near-term outlook and long-term plans for profitable growth. Invitations and additional information to follow.

Investor Day

04•29•15

NEW YORK CITY